Inclusive Businesses Increase Health Care Access in Low-Income Communities

Inclusive businesses (IB) in the health sector are helping the ASEAN pursue its health agenda, which identified priorities such as universal access to quality health care, financial risk protection, and sustainable inclusive development for the ASEAN Community.

IB models provide livelihood opportunities or make relevant products and services accessible to low-income communities. In the health sector, IB models have made an impact in communities where health care products and services are either inaccessible or not prioritized.

“Inclusive businesses not only stimulate economic growth and provide jobs for low-income communities, they also provide solutions and services that meet the basic needs of the poor,” said Trade Undersecretary and Board of Investments Managing Head Ceferino Rodolfo. “Companies in the health sector who adopt IB models have the opportunity to tap a significant portion of our population who are exposed to both greater health risks and the costs they entail.”

Two Philippine IB models in the health sector have shown outstanding results and exemplary models in delivering wide-scale social impact: Generika Drugstore, which recently won the ASEAN Business Awards’ Inclusive Business Category, and Glovax Biotech Corporation.

Low-cost, quality medicines

In 2004, Generika pioneered a business model whose core offering is generic medicines. This transformed the Philippines’ pharmaceutical retail industry as it increased the demand for affordable and quality medicines. In 2014, generic medicines accounted for 65 percent of pharmaceutical sales, a number that is expected to reach 70 percent in 2020.

Generika has 690 stores in more than 70 municipalities nationwide, 68 percent of which are rural communities where the majority of residents are farmers, fisher folk, construction workers, and other blue collar workers who prioritize basic necessities over health care.

Although Generika created its products for low-income communities, the middle class has also started patronizing generic medicines due to its affordability and effectivity. Right now, Generika conducts over 24 million transactions a year.

Generika has other products and services that aim to reach and serve more patients. Its Libreng Konsulta program also lets patients have eight basic laboratory tests and a medical consultation for less than P300. An average of 110 consultations were conducted in stores nationwide this year. Another pioneering effort from Generika is the provision of free information on storage, dosage, side effects, and contraindications for medicines purchased, which pharmacists discuss with patients.

Increased access to vaccines

Founded in 2003, Glovax purchases vaccines from multinational pharmaceutical companies and distributes them under its own brand Euro. The company has 10 distribution branches, five of which are in locations without regular vaccine supplies. These vaccines are distributed to more than 3,000 community clinics and hospitals in 20 Luzon provinces.

In the Philippines, only the upper income segment of the population is covered by vaccination. The complete course of a newborn’s vaccines alone can cost a middle-income household 27 percent of its annual income and 55 percent of a low-income household’s annual income. Since they cannot afford much-needed vaccination, they are more vulnerable to Acute Respiratory Infection (ARI), diphtheria, pneumonia, rabies, tuberculosis, and other deadly diseases that could be prevented by vaccination.

Glovax offers an installment payment option that allows middle and low-income Filipinos to afford vaccination. It reduced as much as 75 percent of vaccines’ price from multinational corporations, sold more than 5 million doses, and prevented 2 million people from having deadly diseases.

Aside from having distribution centers, Glovax operates three retail clinics that also offer affordable access to the full spectrum of vaccines available in the Philippines. Glovax plans to build more clinics in low-income communities by 2018 to make more vaccines available in communities without regular vaccine supply. To help more people receive vaccines, Glovax also partners with socio-civic organizations to give free vaccines. Since 2003, it has distributed more than 100,000 vaccines for free.

In the business of doing good

IB models in the health sector have the opportunity to address the needs of the poor which make up the majority of the population. In the ASEAN region, 332 million live in poverty. Though the Philippines is one of the fastest-growing economies in Asia, one in four Filipinos continue to live in poverty.

The Philippines is narrowing its development gaps by encouraging more companies to adopt IB models. Under the 2017-2019 Investments Priorities Plan (IPP), the BOI is granting fiscal incentives to IB models in the agribusiness and tourism sectors. Though the Philippines is currently prioritizing these sectors, a study of IB models in the ASEAN reveals that IB companies can be found across all sectors in ASEAN member states.

“Adopting an inclusive business model is an opportunity that companies in the health sector should take as it also translates to growth in the long run,” Rodolfo said. “Inclusive businesses can transform the health care sector and make it more responsive to the wider population, which in turn will create and engage markets to fuel business growth and deliver social impact at a wider scale.”